Insulation manufacturers seeking $50 million in Government compensation

A group of insulation manufacturers has reportedly requested more than $50 million in compensation from the government for unused material that experts say is driving prices down across the country. The calls for compensation come months after the government initiated a crackdown on dodgy operators, obtaining search warrants and going after workplaces deemed to be […]

Patrick Stafford 08 July, 2011

A group of insulation manufacturers has reportedly requested more than $50 million in compensation from the government for unused material that experts say is driving prices down across the country.

The calls for compensation come months after the government initiated a crackdown on dodgy operators, obtaining search warrants and going after workplaces deemed to be “unscrupulous operators”.

According to the Australian Financial Review installers CSR, Fletcher Building and Knauf have requested more than $50 million in compensation for unused insulation material kept after the scheme was scrapped.

Fletcher Building said it may take legal action if compensation is not received, CSR has written off $23 million due to scheme being scrapped and Fletcher wrote off nearly $14 million.

Knauf general manager Stuart Dunbar confirmed to SmartCompany this morning that the company will seek compensation from the Government but would not reveal any total amount.

“We were adversely impacted,” Dunbar said.

Last year a number of Green Loans assessors lodged claims for compensation, saying they had been left high and dry after the Government scrapped the assessment program.

Other insulation installers say the Government has not granted requests for compensation.

Andrew Arblaster, president of the Australian Cellulose Insulation Manufacturers’ Association says compensation is urgent because leftover material is causing prices to drop.

“This is just forcing prices down. A lot of it has been dumped and people are just giving it away,” he says.

Arblaster says the industry is simply “trying to survive”.

“We have put several claims in to the Government but in all offers they’ve written back and say they have no case to answer. They have referred to us the original package,” he says.

CSR (which controls the Bradford Insulation subsidiary) and Fletcher were contacted as was the Department of Climate Change and Energy Efficiency, but no replies were available prior to publication.